CMS Rejects California’s Alternative SMAA Deferral Proposal

In a letter received by the California Department of Health Care Services (DHCS) on March 16, 2015, the federal Center for Medicare and Medicaid Services (CMS) rejected the state’s most recent proposal to end the school MAA deferral with final settlement payments to schools and no backcasting requirement for past claims. CMS also asked that DHCS submit a backcasting proposal for their review by April 1, 2015, in accordance with the original settlement reached in October 2014.

Barring further developments, this means that California must continue to operate under the original deferral settlement terms reached with CMS in 2014. This includes a process of interim payments to be issued in the coming months and a requirement to backcast the majority of deferred claims to determine final the final payment amount. CMS has requested that the backcasting method include 4 quarters of RMTS data, which means the process of backcasting won’t be able to start until all data is collected sometime after April 2017.